New Delhi, Mar 24 (KNN) India’s overall business activity growth eased slightly in March, as a robust manufacturing sector expansion failed to fully offset a slowdown in services, according to a private survey released Monday.
HSBC’s flash India Composite Purchasing Managers’ Index, compiled by S&P Global, edged down to 58.6 in March from February’s final reading of 58.8, falling short of the 59.0 median prediction in a Reuters poll. The index remained well above the 50-mark that separates growth from contraction.
The manufacturing PMI rose to 57.6 from 56.3, continuing its expansion streak of more than three-and-a-half years. “India’s manufacturing sector expanded at a faster pace in March… The output index rose to its highest level since July 2024,” noted Pranjul Bhandari, chief India economist at HSBC.
New orders and output increased from the previous month, indicating improved operating conditions for manufacturers. However, the dominant services sector’s PMI declined to 57.7 from 59.0 in February, weighing on the overall index as demand weakened.
International demand for both manufacturing and services slowed, expanding at the weakest pace in three months. “The moderation in new export orders growth was also noteworthy amid tariff announcements,” Bhandari added, likely referring to trade uncertainties created by recent U.S. tariff policies.
Business sentiment for the year ahead fell to a seven-month low, dampening hiring activity. Meanwhile, input costs increased more rapidly in March, with goods producers recording the fastest inflation in three months.
Despite rising costs, businesses largely refrained from passing these increases to clients, with overall charge inflation rising at its weakest pace since February 2022.
“The margin squeeze on manufacturers intensified as input price inflation ticked up while factory gate prices rose at the weakest rate in a year,” Bhandari observed.
The moderation in pricing pressure aligns with India’s consumer inflation, which fell below the Reserve Bank of India’s medium-term 4% target in February for the first time in six months, potentially setting the stage for another interest rate cut next month.
(KNN Bureau)
